Town Hall eyes sale of waste treatment plant

John Burgeson

Updated 5:13 pm, Saturday, March 15, 2014

Mayor John Harkins With a 5.7 percent tax increase likely for the coming fiscal year, the administration of Mayor John Harkins is considering a sale of the town’s waste treatment plant as a way to subtract from that figure. The mayor said that discussions on selling the plant are still in the early stages, but “getting the town out of the utility business” is one of the options his office is considering.
Photo: Ned Gerard

STRATFORD -- With a 5.7 percent tax increase likely for the coming fiscal year, the administration of Mayor John Harkins is considering a sale of the town's waste treatment plant as a way to subtract from that figure.

The mayor said that discussions on selling the plant are still in the early stages, but "getting the town out of the utility business" is one of the options his office is considering.

"We've been approached by a number of people -- the Greater New Haven Water Pollution Control Authority, the Town of Monroe, the Town of Trumbull, the Bridgeport WPCA -- and we've talked to all of them," Harkins said. "I have to talk to them, because it would be irresponsible to the taxpayers of Stratford if I didn't."

How much the plant would sell for is unknown at the moment. Officials said they're in the process of getting an independent assessment of how much the plant, at the eastern end of Birdseye Street, is worth.

The city wouldn't see all of the proceeds if the plant is sold. A good chunk of the sale would be used to pay off its debt -- debt that was incurred when the plant was upgraded in the 2008-09 fiscal year at a cost of nearly $60 million to reduce the amount of nitrogen entering Long Island Sound.

There has been a treatment plant of some sort there since 1919.

It now handles about 9 million gallons of effluent per day, or about 174 gallons per person per day. It has a capacity of 11.5 million gallons per day.

A small number of customers live in Bridgeport, Shelton and Trumbull. These homes are connected to the Stratford system because of elevation and geographical considerations.

One-family households pay an annual sewer use fee of $375. The treatment plant and its system of sanitary sewer pipes that serve the town are governed by the Water Pollution Control Authority, which is a "full council committee" of the Town Council.

But not everyone supports the decision to sell the plant.

"This is something that the Harkins administration has been looking to do since they entered Town Hall," said Terry Masters, a Democrat who ran for the 120th House district in 2012. "We have a really nice state-of-the-art plant and it's not an asset that we should be selling for a small, one-time gain. Our rates will go up and our water quality will go down."

In recent years, the sanitary sewer operation has had expenses and revenues of about $9 million to $10 million annually.

The authority employs about 17 workers and managers. Since the 2012-13 fiscal year, the town has charged the WPCA about $490,000 annually for contractual services.

The plant last year also generated $238,000 by selling nitrogen credits to other, less effective plants in Connecticut. It was able to do this because of the recent upgrades.

"It makes sense to regionalize," Harkins said, "but we have to assess what the benefit will be to the taxpayers."

Harkins said that he knows that people aren't happy with their sewer use fees, but the debt incurred by the plant improvements had to be addressed and it made the increases mandatory.

"At some point, we have to pay that loan back," he said. "It's not something that can be guided by politics as opposed to reality."

Harkins said that if the plant were sold, the town would get a seat on the owner's board of directors and at least have some say into how it's run.

And if it is sold, it wouldn't be wise to funnel all of that capital into property tax relief. It would be best to use some of that money for the town's reserve fund and some of it for capital purchases, he said.

"If the sale makes sense, we should do it," Harkins said, "but if it doesn't, we don't sell."

Selling a public waste treatment plant would be complicated, state officials told Hearst Connecticut Media, because of all of the state and federal grant and loan money that was used to build and modify it over the decades. A sale to a private, for-profit company might be out of the question for this reason, a source said.

The mayor also said that the town will have to address other issues in future years. At some point, he said, Stratford High School will have to undergo either a major renovation, or a new high school will have to be built to replace it.

For now, the town's spending plan for 2014-15 is still up for debate.

The mayor's budget, if adopted by the Town Council, would raise the mill rate from 34.64 to 36.62, an increase of 1.98 mills.

In Connecticut, houses are assessed at 70 percent of their market value, meaning that a Stratford home with a market worth of $350,000 and an assessed value of $245,000 would see its taxes increase from $8,486 to $8,967, or $481.

Stephanie Phillips, one of two Democrats on the Town Council, was circumspect about the 5.7 percent increase that the Harkins, a Republican, is requesting.

"I was expecting it to be this amount of an increase or more," she said. "We have to deal with the pension obligations, and we haven't been funding the Board of Education at the level that they really need to be at."

A year ago, the mayor's budget increased the mill rate by .16 mills and the budget sailed by the Town Council virtually unchanged.

Former independent mayoral candidate George Mulligan, who has been critical of the town's ballooning pension obligations, said that this is a problem that was created by decisions made by the Town Council in 1995 and 1996.

"There will have to be more pension bonding and more pension shortfall deposits because they're not counting overtime in their calculations," Mulligan said. "Pensions will cost Stratford taxpayers by 2019 almost $700 million, and more beyond that."